Negroponte: Europe's Net development held back by fear of youth, risk taking

LONDON (IDG) -- If there is one thing Nicholas Negroponte can't be called, it's a conformist. Speaking at the International Data Corp.'s (IDC) European IT Forum here, he gave his own unorthodox predictions for the future of the Internet in Europe, and his views on why distrust of the youth and aversion to risk may be holding the Internet back.

The key differences between European and U.S. psychology is that Europeans generally don't trust youth as much as Americans do, and the Europeans are afraid of risk, Negroponte said. This makes it difficult for a young upstart company to find venture capitalists to finance their ideas, according to Negroponte, the founder and director of the Media Lab at the Massachusetts Institute of Technology (MIT).

And Negroponte wasn't afraid to use comedic stereotypes to "prove" some of his theories about Europeans.

"You look at countries like Italy and Spain, which both have low (Internet user) numbers, but Italy could actually be more wired than France," Negroponte said. First of all, Italy has "much more respect for the little guy," he said. Second of all, Italy has "a strong and established underground economy," and finally, it has a "very healthy disrespect for authority," he said.

One of Negroponte's strongest points was that Europe's Internet numbers are being kept lower than they should be by telecommunications pricing.

"When (European telecom) companies were told they'd have to get ready for privatization, they raised their local costs, and the metered rate was either continued or switched to," he said. "The only solution is to make all calls a local rate," he added, noting that with metered local calls, almost 50 percent of the charges went towards billing. With a local rate plan, consumers generally are charged a flat rate for all local calls, no matter how many they make or for how much time.

Negroponte also made it clear that he did not believe the spreading hype that the world is eventually headed for a single global currency. "I think companies will soon create currencies that will be more like loyalty points or frequent-flyer miles, thousands and thousands of currencies, almost none of which are issued by governments," he added.

He also has issues with forecasters and their numbers, saying that recent figures stating that there will be 500 million Internet users by 2003 are "off by a factor of two." He also said that a large problem with analysts is that they seem to only include Europe, U.S. and sometimes Japan.

"That's preposterous," said Frank Gens, Senior vice president, Internet Research for IDC, defending IDC against Negroponte's accusations for leaving out the rest of the world. "I would challenge any statement that says our numbers are way off the mark. These areas have high variants in terms of what the numbers will look like." Factors including government policy in China and financial stability in Asia generally can sway these numbers, according to Gens.

"There are 200,000 paid subscribers in Mexico," he said. "Each account has an average of six users," he added. Six people pool their money to get one "timeshare" on the account. "Is that 200,000? Or is it 1.2 million possible customers?" Negroponte asked, questioning forecaster numbers.

"He paid a visit there; we have 20 analysts there," Gens defended. "And our model there is users per household," he added.

In his speech however, Negroponte claimed estimates from forecasters tend not to take other issues into consideration.

"In some countries in Latin America, they are completely willing to take more chances with technology, because they have nothing to lose," he added.